> In Bitcoin's case, I believe demand is rising because of fundamental advantages it has over other forms of virtual currency that won't soon be rivaled.

So demand has increased 1000% since the low of $3 less than a year ago? I don't buy that reasoning. I think it is 90% speculation and 10% increased demand. Demand is increasing, but nowhere near the amount to explain the large price shifts.

Disclaimer: I have a reasonably sized investment in bitcoins.